Lindquist v. Cnty. of Nicollet

• Decision Date: 15 November 2021
• Docket Number: 52-CV-21-16
• Parties: Rodney Lindquist, St. Peter Hospitality LLC, Petitioner, v. County of Nicollet, Respondent.
• Court: Tax Court of Minnesota

Rodney Lindquist, St. Peter Hospitality LLC, Petitioner, v. County of Nicollet, Respondent.

No. 52-CV-21-16

Tax Court of Minnesota, Regular Division, Nicollet County

November 15, 2021

This consolidated matter came on the motion of Nicollet County to dismiss pursuant to Minnesota Statutes section 278.05 subdivision 6, before The Honorable Wendy S. Tien, Chief Judge of the Minnesota Tax Court.

Rodney Lindquist, St. Peter Hospitality, LLC, Petitioner, appeared through Rodney Lindquist.

Megan E. Gaudette Coryell, Assistant County Attorney, represents respondent Nicollet County.

ORDER DENYING COUNTY'S MOTION TO DISMISS

WENDY S. TIEN, CHIEF JUDGE

The County moved to dismiss this property tax petition on the grounds petitioner did not timely and completely provide information required by Minnesota Statutes section 278.05 subdivision 6 (2020).

The court, having heard and considered the arguments of the parties and counsel, and upon all of the files, records, and proceedings herein, now makes the following:

ORDER

1. The County's motion is denied.

2. Not later than thirty days after the date of this Order, St Peter Hospitality LLC must make disclosures to the County in accordance with the following clauses of Minnesota Statutes section 278.05, subdivision 6(a), unless already provided:

(1) a year-end financial statement for the year prior to the assessment date;

(3) a rent roll on or near the assessment date listing the tenant name, lease start and end dates, base rent, square footage leased and vacant space; and

(4) identification of all lease agreements not disclosed on a rent roll in the response to clause (3), listing the tenant name, lease start and end dates, base rent, and square footage leased.

For purposes of this Order, "assessment date" means the assessment date January 2, 2020, for taxes payable in 2021. Failure to make the above disclosures within the time specified in this Order will result in dismissal with prejudice.

3. If St. Peter Hospitality LLC intended to petition with respect to a different assessment date than defined in paragraph 2 of this Order, it must notify the County, and this court, in writing not later than thirty days after the date of this Order.

4. Not later than thirty days after the date of this Order St. Peter Hospitality LLC must file an affidavit with this court stating whether it is a single-member LLC or not, and if it is a single-member LLC, identifying its sole member.

IT IS SO ORDERED.

MEMORANDUM

I. Facts

On January 8, 2021, Rodney Lindquist, St. Peter Hospitality, LLC, filed a property tax petition alleging that the estimated market value of the subject property is unequally assessed when compared with other properties.^[1] The petition refers to a subject property, PID No. 19.667.0010, located at 1301 Old Minnesota Avenue in St. Peter, which the petition describes as income producing.^[2] The petition also states that the assessment date of the subject property is January 2, 2021, for taxes payable in 2021.^[3] The petition attaches a copy of a statement for "Proposed Taxes 2021," stating an estimated market value in taxes payable year 2020 of $1, 457, 800 and an estimated market value in taxes payable year 2021 of $3, 913, 000.^[4]

On January 29, 2021, the Assistant Nicollet County Attorney sent Mr. Lindquist on behalf of St. Peter Hospitality LLC a letter (the "January 29 letter") setting forth the County's general approach to tax cases. The letter states, in relevant part:

This Office will initially forego formal discovery to gather [data], assuming you share our goal to efficiently settle this case without going to trial and you will cooperate with the Assessor's Office's requests. Additionally, you may be required to timely provide to the Assessor's Office certain specific data on income producing property pursuant to Minn. Stat. § 278.05, subd. 6.^[5]

On June 2, 2021, according to Lorna Sandvik, the Nicollet County Assessor, Mr. Lindquist provided:

a year-end financial statement for the year of the assessment date; the net rentable square footage of the building or buildings through a previously provided appraisal; and

anticipated income and expenses in the form of a proposed budget for the year subsequent to the year of the assessment date.^[6]

The County considered the disclosures incomplete as they did not include a year-end financial statement for the year prior to the assessment date.^[7] Ms. Sandvik sent Mr. Lindquist an email (the "July 22 email") requesting solely that he provide the following information: "Please confirm that you were not open for business the year prior to the assessment date." ^[8] Mr. Lindquist responded that "we opened July-August 2019[.]" ^[9]

On August 17, 2021, the County filed a motion to dismiss under Minnesota Statutes section 278.05, subdivision 6 (2020). ^[10] The County states it did not receive complete disclosures; specifically, that it did not receive a year-end financial statement for the year prior to the assessment date.^[11] On October 11, 2021, Mr. Lindquist, on behalf of St. Peter Hospitality LLC, filed a response to the County's motion.^[12] Mr. Lindquist states "I misunderstood and still do not understand Assessment Date and how that relates to when Taxes are payable." ^[13] He further states,

"June 2, 2021 I submitted what I honestly believed was the proper and timely 'information required by Minnesota Statutes'. This included 2020 year end financials and propsed [sic] budget. In that email I stated... 'I am not aware of anything else but please let me know if I am missing anything[.]'"^[14]

He further recounts,

"Not until July 22, 2021 (7 weeks) do I hear from Nicollet County and the email just asked me to 'Please confirm that you were not open for business the year prior to the assessment date'. I was working out of town that week so immediately Monday morning July 26, 2021 (5:53 AM) I replied 'We opended [sic] July-August 2019'."^[15]

"Trusting I would hear back if I was 'missing something' (re; my June 2nd email) I took it that my submittals on June 2nd were correct and the August deadline was met."^[16] Mr. Lindquist included the 2019 financial statements with his response.^[17]

A hearing on the County's motion was held by Zoom on October 13, 2021. At the hearing, the County acknowledged that the petition stated the same assessment date and taxes payable date.^[18] Mr. Lindquist reiterated the statements from his written response that he found "very confusing" the use of the term "assessment date."^[19] He expressed confusion about the timing of tax payments versus "assessment date."^[20] He also expressed his view "the assessor's office slipped one by me" through the July 22 email, which asked whether petitioner was open "with no mention or reference of any assessment dates."^[21]

II. Background

A. The Mandatory Disclosure Rule

Minnesota Statutes section 278.05, subdivision 6, sometimes called the "mandatory disclosure rule," specifies that, in cases where the petitioner contests the valuation of income-producing property, certain information must be provided to the county assessor no later than August 1 of the taxes payable year. Failure to submit the required documentation by the August 1 deadline results in automatic dismissal of the petition unless an exception applies. Minn. Stat. § 278.05, subd. 6(b); Wal-Mart Real Estate Bus. Tr. v. Cnty. of Anoka, 931 N.W.2d 382, 386 (Minn. 2019). "[T]he purpose of the [mandatory disclosure rule] is to provide information that would be useful to the determination of value…." Kmart Corp. v. Cnty. of Becker, 639 N.W.2d 856, 859 (Minn. 2002); see also 78th St. OwnerCo, LLC v. Cnty. of Hennepin, 813 N.W.2d 409, 413 (Minn. 2012) ("[T]he taxpayer must disclose all information to which it has access so that a county can conduct a thorough and accurate assessment."). In other words, the mandatory disclosure rule ensures the taxing authority receives "all information a petitioner actually possesses relevant to application of the income approach to valuing real property." Sadat v. Cnty. of Scott, No. 70-CV-12-8404, 2015 WL 410434, at *1 (Minn. T.C. Jan. 29, 2015) (citing Irongate Enters., Inc. v. Cnty. of St. Louis, 736 N.W.2d 326, 330-31 (Minn. 2007)).

B. Timeliness

The August 1 deadline in the mandatory disclosure rule contains two exceptions. The first applies when the failure to provide the required information to the county assessor was due to the unavailability of the information at the time that the information was due. Minn. Stat. § 278.05, subd. 6(b)(1). The second applies when the petitioner "was not aware of or informed of the requirement to provide the information." Minn. Stat. § 278.05, subd. 6(b)(2). If the petitioner proves it was not aware of or informed of the requirement to provide the information, the petitioner has an additional 30 days to provide the information from the time it became aware of or were informed of the requirement. Id. Failure to do so requires dismissal of the petition. Id. at subd. 6(b). Delay in providing information required by section 278.05, subdivision 6 need not cause actual prejudice to the county to result in dismissal. Kmart, 639 N.W.2d at 859 (noting the mandatory disclosure rule provides "an extraordinary remedy unlike our traditional rules of discovery") (citing BFW Co. v. Cnty. of Ramsey, 566 N.W.2d 702, 704-05 (Minn. 1997)).

III. Analysis

The mandatory disclosure rule requires that the petitioner provide information to the county assessor concerning income-producing property, and places the burden of doing so on the petitioner. See Wal-Mart, 931 N.W.2d at 386-87. A petitioner may not decline, for example, to provide information required by the mandatory disclosure rule based on a subjective belief the...